As seen in the Maui News, May 31, 2003 www.mauinews.com Creating a $7 million home on spec risky but rewarding. by Harry Eagar Staff Writer If you're going to build a speculative house in the $7 million range, you had better understand your target customer intimately. Because if you don't get it exactly, the buyer could build something else himself. Larry Frej, one of the developers of such a house at Maluhia at Wailea, says, "We do make up a story. We make up a family that meets the socioeconomic profile" of the target buyer. For this house, one of an eventual 14 at Maluhia, the prospective buyer is a family with 2.3 children that loves to travel, has two or three other houses, "sees Hawaii as a luxurious, safe haven," admires and collects Eastern art, and prefers "a casual, open lifestyle." Apparently Frej and his partners at PRM Realty Group LLC had a pretty good insight, because just six days after a reception to introduce the house two weeks ago, they had an offer. Negotiations continue. "The people who don't cut corners win," says Bob Cella, principal broker at Coldwell Banker Island Properties about multimillion-dollar speculative developments. Coldwell Banker is listing and sales agent for the entire Maluhia property on the shoreline just north of the Renaissance Wailea Beach Resort. Here's what you get for $6.5 million: a half-acre within walking distance of the beach with dedicated views; gates; private concierge at a beach club; and a 5,400-square-foot, four-bedroom house. For an additional amount -- roughly $800,000 -- you can get the furnishings that were made for this house by Crisscross, which is a joint venture of PRM and Group 70, the architects for the house. Frej, Hawaii vice president of PRM and a principal of Crisscross, wears two hats on the project. This is PRM's second attempt to produce a model house at Maluhia and about the umpteenth to get this parcel developed. The first model, about the same size but a "classical Hawaiian" design, sold immediately and couldn't be used as a model any longer. The current model -- look quick before it's gone -- is an Asian design with a hala motif. The hala leaves show up, for example, in a carved staircase. Almost all the furnishings were not merely designed for the house, but some of them use techniques invented for it. None of the designs will be repeated elsewhere. For example, cabinets throughout the house are made of interwoven coconut strips, although some are left rough, some are polished as smooth as Formica. This technique was devised just for this house. The bedspreads are woven of pineapple fibers in a plumeria motif. The thread was spun especially for this project in Indonesia. The walls are hung with a sample of contemporary Chinese artists, though there are a few antiques scattered around, including silk rugs and some Chinese pottery cups recovered from a 16th-century shipwreck. Suzanne Nessel, one of the interior designers, says, "We've committed to everything being unique." For more money, you can get more house. The project, a single-family detached condominium development on 10.5 acres, has a few lots fronting Mokapu Beach, one of which is under construction with a 14,000-square-foot, $25 million house. Off the beach, up a rising hillside, the houses and lots run between $6.5 million and $7.5 million. PRM is building some spec homes, but buyers are free to design their own, as the big one has been. PRM Realty Group is led by Peter Morris and Robert Harte. Morris has been trying to develop Maluhia since at least 1988, when VMS Realty Partners, which he founded, bought large tracts at Wailea and Makena. VMS developed projects such as Grand Champions, but it went bust in 1990. The Maluhia lot was sold to others who at one time proposed 64 luxury condominiums -- though at a mere $1 million apiece not as luxurious as Maluhia today.